Bo McCarver’s weekly housing news compilation – 12/8/2009

The Obama Administration’s efforts to curtail foreclosures slowly begin to take effect as several large banks accept short sales. The largest mortgage holder, the Bank of American, lags in restructuring loans, however.

Meanwhile, Galveston continues to provide a laboratory for housing woes: a year after Hurricane Ike, the county has finally released federal emergency relief funds. On another front, NIMBY residents unite and attempt to avoid Fair Housing laws by blocking the rebuilding of public housing units destroyed by recent hurricanes.

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Banks warming up to short sales to reduce foreclosures

By John Gittelsohn and Margaret Collins        Bloomberg News December 5, 2009

NEW YORK — Drew Schlosser tried for two years to sell his three-bedroom waterfront condominium in Punta Gorda, Fla., for less than he owed on its two mortgages. The deal went through last month when Wells Fargo & Co. agreed to take a $165,000 loss on the loans.

Even after he had an offer of $155,000 for the property, it took five months for the lender to approve the purchase, a so-called short sale, in which the bank accepts less than the balance owed on a property. Schlosser said earlier offers had fallen through as bidders lost faith the bank would take less than the $320,000 in two mortgages.

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Bank of America Says U.S. Home Loan Modifications Top 160,000

By David Mildenberg        Bloomberg Press December 7, 2009

Bank of America Corp., the largest U.S. bank by assets and deposits, said it has modified loan terms for more than 160,000 borrowers in a U.S. program as the government presses lenders to curb foreclosures.

The number of borrowers in trials under the Obama administration’s Home Affordable Modification Program climbed from 136,994 on Oct. 31, the bank said today in a statement. The Treasury Department last week said lenders that took U.S. aid and aren’t doing enough to ease mortgage payments under the program may be sanctioned or fined.

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Six accused of dealing in mortgage fraud

By Guillermo Contreras        San Antonio Express-News December 8, 2009

Six people from the San Antonio area, including a Somerset reserve police officer, have been indicted in what investigators say was a $1.9 million mortgage-fraud scheme.

FBI agents identified ringleaders as real estate broker Darnell Mason and mortgage broker Justin Zhu and said the two recruited “straw” borrowers for homes Mason wanted to acquire throughout San Antonio.

Mason owns and operates real estate brokerage firm PLV Realty and a related company, Property Management LLC. Zhu was a mortgage broker with AIM Mortgage and also has been a sales representative for Millenium Merchant Services LLC, which provides credit card processing machines to small businesses, the 18-count indictment said.

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Tax credit fuels skyrocketing Dallas-area preowned home sales

By Steve Brown      Dallas Morning News December 7, 2009

The North Texas housing market came roaring back in November.

Preowned home sales rose by 31 percent last month from a year ago – one of the biggest such increases on record.

And median home sales prices were up 5 percent.

The big jump in residential transactions came as large numbers of homebuyers rushed to take advantage of the federal home buying tax credit, which has been extended.

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Eminent Domain: Can We Define Blighted?

By Diana Lind      Next American City Magazine December 2009

It was big news when Pfizer, the pharmaceutical company that “set off a landmark eminent domain battle,” announced that it was leaving New London and taking 1,400 jobs with it. It called for a look back at that Supreme Court case, Kelo vs. New London. Here is a choice quote that the NY Times used:

In a 5-to-4 decision, the high court ruled that it was permissible to take private property and turn it over to developers as part of a plan to bolster the local economy. Conservative justices, including Clarence Thomas, dissented. Justice Thomas called New London’s plan “a costly urban-renewal project whose stated purpose is a vague promise of new jobs and increased tax revenue, but which is also suspiciously agreeable to the Pfizer Corporation.”

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Green Acres Is the Place to Be

The Recession Is Inspiring More Young Families and Singles to Head Back to the Country

By Gwendolyn Bounds      Wall Street Journal December 5, 2009

In June, 40-year-old Shane Dawley and his 36-year-old wife, Rhonda, uprooted themselves and their four boys from their suburban Atlanta rental home and bought an old five-acre farm in Ogdensburg, Wisc. Their goal: Flee the rat race and adopt a more self-reliant lifestyle amid the troubled economy.

While Mr. Dawley, who had worked at a parking garage, hasn’t found a full-time job yet, he’s been working on nearby farms learning new skills (one person paid him with an old John Deere tractor), and his family is raising chickens while learning to garden and hunt.

“Our generation has never seen anything like this,” says Mr. Dawley of the economic downturn. “Fear sometimes is a good thing and will push you to do things you ordinarily wouldn’t.”

While urban and suburban real estate is still generally under pressure, the rural market is holding up better in many areas, thanks in part to buyers such as the Dawleys. Sometimes dubbed “ruralpolitans,” these city and town dwellers are looking at land as their new safe investment, one they hope could prove more stable than their jobs and 401(k)s—and provide a better lifestyle.

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Councilman: Panel should debate only GHA plan

By Rhiannon Meyers      Galveston County Daily News Dec. 2, 2009

Planning commission members deliberating a public housing plan to recommend to the city council should consider only the official plan approved by the Galveston Housing Authority, not those submitted by other groups, Councilman Tarris Woods said.

Woods said he would ask council members Thursday to review the direction given to the planning commission about its review of the public housing authority’s proposal to rebuild the 569 units of public housing occupied before Hurricane Ike struck Galveston on Sept. 13, 2008, flooding four public housing developments.

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Group issues legal challenge on public housing

Galveston County Daily News December 5, 2009

GALVESTON — The Galveston Open Government Project has issued a legal challenge to the city of Galveston, saying the concentration of housing units on the island violates federal law.

The group, which has contested the Galveston Housing Authority’s plans to rebuild 569 units destroyed by Hurricane Ike, said public housing units would have to be scattered throughout the county to comply with federal court rulings.

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GHA tweaks redevelopment plans

By Rhiannon Meyers       Galveston County Daily News December 8, 2009

GALVESTON — The housing authority Monday outlined ways it responded to public critique in the past 45 days by revising its public housing redevelopment plan to lower density and boost the number of scattered-site houses.

The redevelopment plan calls for replacing the 569 public housing units destroyed in Hurricane Ike with 340 units in public housing developments on the original footprints of the four demolished developments and adding another 229 scattered-site units across the island.

In response to an alternative plan created by a neighborhood association, the housing authority also promised to explore acquiring existing vacant structures, even though Executive Director Harish Krishnarao has warned renovating existing houses could cost more than building new ones.

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County, city start Ike housing help

By T.J. Aulds         Galveston County Daily News December 6, 2009

More than a year after Hurricane Ike, Galveston County’s effort to get federal aid to residents whose homes were damaged by the storm is under way. While a month behind the initial launch, the Galveston County Housing Assistance Program had its first face-to-face meetings with residents who applied for help in rebuilding or repairing their houses. The county has about $99 million to make repairs or rebuild storm-wrecked homes. About $15 million of the money from the Housing and Urban Development Community Block Grant program will cover administrative costs of the program, county officials said.

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Housing authority director’s $60,000 bonus irks Emmett

By Chris Moran       Houston Chronicle December 8, 2009

The county’s public housing boss got a $60,000 bonus last month for the second consecutive year, prompting County Judge Ed Emmett to question the decision to boost his pay by about 30 percent while other public agencies are tightening spending.

Guy Rankin stands to make more than $260,000 this year as executive director of the Harris County Housing Authority. Two years ago, his salary was $102,502.

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